From Product-Centered to Servitized Industry (original) (raw)
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Servitization and Productization: two faces of the same coin?
The ongoing convergence and integration between manufacturing and service sectors involves the firms' adoption of new strategies, namely: servitization and productization. Despite servitization having already been discussed in depth by scholars, little has been said on productization. The thematic analysis of 27 peer-reviewed journal articles lead to define productization as the process of transforming a service company offering by adding tangible products or by decomposing service components into combinable modules. Moreover, productization and servitization need to be considered as " two faces of the same coin " , which acting reversely lead to considering the existence of a new company type: the solution provider.
2002
Abstract Servicizing, a novel business practice that sells product functionality rather than products, has been touted as an environmentally beneficial business practice. This paper applies insights from transaction cost economics (TCE) to describe how servicizing transactions mitigate some problems associated with sales transactions, while creating several others. Servicizing's success requires manufacturers to develop contracts that attract customers while protecting their interests.
The adoption of servitization strategies by UK-based manufacturers
Proceedings of the Institution of Mechanical Engineers, Part B: Journal of Engineering Manufacture, 2009
Almost all manufacturers offer services but some use these as the basis for their competitive strategy. This is a growing area of interest amongst practitioners, policy makers and academics, yet where little is known about the adoption of servitization by UK manufacturers. In this paper we present a survey that has explored the extent, motivations, challenges and successes of servitization within the B2B sector. The findings indicate, for example, that many manufacturers are succeeding with their service strategies, that they are attracted to these as a source of customer focus and revenue growth, and that such strategies require less organisational change than might be expected. Although the findings from the survey should be treated as preliminary, and further work is needed to confirm their reliability and insight, they indicate that servitization is proving to be a powerful competitive weapon for many companies.
Journal of Open Innovation: Technology, Market, and Complexity, 2018
The economies of the industrialized world have become dominated by services. Many manufacturing companies have changed from producing products to providing services. However, many companies still lag behind in this transformation. It is observed that most of the published methodologies are at an advanced level and provide minimal assistance to help managers and especially the managers of small and medium enterprises (SMEs) who are interested in easy-to-use methodologies for transforming their product range. Therefore, a model that assists the transformation of products into services is proposed, which is at a level that can be directly applied by SMEs. A utility-driven approach is followed to establish the model that consists of seven steps. In the initial steps, a product that is to be servitized is selected and broken down into its utility features and customer barriers. Furthermore, options for increasing utility and reducing barriers are presented such that the overall tangibili...
Providing Industrial Solutions-Discussed from the Perspective of Contracting
Integrating products and services into customized solutions helps firms to gain competitive advantage ). For delivering effective solutions a close relationship and interaction between buyer and seller is needed. Therefore, organizational mechanisms, in particular formal and relational contracting, have to be implemented for controlling opportunistic behavior and coordinating the resource pooling (e.g. Klein . Based on three in-depth case studies in the B2B-context (Yin 2008) this paper shows, what key elements formal contracts should have and which relational norms are relevant when shifting from selling pure products or services to providing solutions. Furthermore, it is illustrated how the complementary relationship between formal and relational contracting contributes to the management and success of solution selling. As empirical research on inter-firm contracts is relatively sparse (De Jong and Klein Woolthuis 2008), the findings help to provide a better understanding of the relevance and the required structure of contracts, especially when firms undergo the strategic shift to providing solutions.
Managing servitization in product companies: the moderating role of service suppliers
International Journal of Operations & Production Management, 2019
Purpose-The purpose of this paper is to study service innovation in product companies (servitization) by considering the relationship (moderation) between product companies and service suppliers. Methodology-Using a relational view of the firm, we propose that there are three main business dimensions that product companies have to manage in servitization and that the support of service suppliers can moderate the effects of these dimensions on the benefits obtained from the Product-Service System (PSS) delivered. To test these hypotheses, we perform a cross-sectional quantitative survey in 104 Brazilian and Italian product companies. Findings-Our findings show that the three business dimensions are important for servitization while there is a trade-off decision regarding service suppliers' involvement since suppliers act differently depending on the PSS orientation (product or service-oriented). Research limitations/implications-Our work is limited to the analysis of what should change in a company during servitization and the impact of supplier's support. Further research is needed to complement this study by analyzing the process and context of the organizational change. Originality/value-This is one of the first quantitative studies to provide evidence of how service supplier' support affects different servitization business dimensions and the obtained benefits for both product and service-oriented outputs. Practical implications-Our research contributes an understanding about how the benefits practitioners can obtain from servitization are strongly influenced by the involvement of service suppliers and how this influence depends on the PSS orientation of the product company.
Service Products and Productization
Journal of Business Research, 2021
Many services are difficult to understand and communicate, and as a result, difficult to position, differentiate, and sell. While important, understanding services as well-defined products has hardly received research attention although doing so offers a host of potential benefits. This conceptual article makes the following contributions. First, it synthesizes the literature to develop a better understanding of service productization as a process that transforms variable, ad-hoc services and service products into well-defined service products (i.e., 'productized services'). Second, it advances that well-defined service products are (1) specified (i.e., have a formalized value proposition and are configured, standardized, systemized, and often also modularized and bundled), (2) branded (i.e., have a name, symbol, or design), (3) and priced (i.e., have clearly stated prices). Third, this article advances managerial practice by exploring the concepts and tools available to productize services and outlining managerial benefits and potential drawbacks of highly productized services.